Throughout history, several major economic trends have shaped the world. These include:
Agricultural Revolution (~10,000 BCE): The transition from hunter-gatherer societies to settled agricultural communities, leading to the rise of the first civilizations.
Invention of the Printing Press (1440s): By Johannes Gutenberg¹, revolutionizing communication and spreading knowledge, which fueled the Renaissance² and the Protestant Reformation³.
Industrial Revolution (18th-19th Century): The introduction of machinery, including the steam engine, transformed manufacturing and transportation.
Electrification (Late 19th Century): The widespread adoption of electricity transformed industries, homes, and cities.
Invention of the Internet (1960s-1990s): This development revolutionized global communication, commerce, and information access. While many companies have emerged since the Internet’s inception, notable winners include Amazon, Google, and Microsoft.
Which are the trends of the present
now in our day, today, 2024, I see two major trends that are revolutionizing the economics of many industries.
Artificial Intelligence (AI): Investments in AI-driven companies continue to be a major trend, creating significant changes in how we work and study. Companies like Nvidia, Microsoft, Open AI (the creator of ChatGPT), and Alphabet (Google) are leaders in AI innovation.
Pharmaceuticals: New weight loss drugs like Wegovy and Ozempic are attracting significant investor attention. Companies like Novo Nordisk and Eli Lilly, the creators of these drugs, have seen their stock prices increase by approximately 100% per year.
Which are the trends of the future
This raises an intriguing question: Are there investments that haven’t yet entered the mainstream where early adopters could reap substantial returns?
No one can predict the future, but I will put my money on Technology Select Sector SPDR Fund (XLK) ($209.35) which is heavily weighted toward companies like Apple, Microsoft, and Nvidia and Communication Services Select Sector SPDR Fund (XLC) ($85.56) which include companies such as Alphabet (Google), Meta Platforms (Facebook), and Disney. With the exception of Disney, all of those companies have have huge networking effects, and monopoly powers that only the government could derail their dominance.
Which industries do you think will lead in the next 12 months?
Glossary
¹ Johannes Gutenberg was a German inventor and craftsman who invented the movable-type printing press. Though movable type was already in use in East Asia, Gutenberg’s invention of the printing press enabled a much faster rate of printing.
² The Renaissance is a period of history and a European cultural movement covering the 15th and 16th centuries. It marked the transition from the Middle Ages to modernity and was characterized by an effort to revive and surpass the ideas and achievements of classical antiquity.
³ The Protestant Reformation was a religious reform movement that swept through Europe in the 1500s. It resulted in the creation of a branch of Christianity called Protestantism, a name used collectively to refer to the many religious groups that separated from the Roman Catholic Church due to differences in doctrine.
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